The EUR/USD started the week in a range, failing twice to sustain a break below 1.34. The market did reach toward 1.3360, but followed with a bounce toward the 1.3560rangeresistance. As we head into the Tuesday US session, the EUR/USD is showing strength breaking above resistance, and now testing 1.36. You can see in the 1H chart that the 1.3626 level is 61.8% retracement as well as the 200 period simple moving average. If the market pushes through this level. We can see it attacking the 1.37 pivot, near 78.6% retracement (1.3697).

The European debt crisis continues to be the monkey on the Euro's back. The latest major theme is whether the European Financial Stability Facility (EFSF) can be expanded (not likely), or by leveraged up to increase its lending capacity without actually increasing its size. Panic and optimism wavers back and forth in this life of the debt crisis. This week, the market is so far in a more optimistic mood.

The 4H chart shows this optimism bringing the EUR/USD to test a declining trendline. A push to 1.37 can break this, and a push above 1.37 can confirm the break, signaling a rally toward 1.3950. Note that even in this scenario, the EUR/USD is NOT bullish, as it will still trade below the 200 period simple moving average. However we would be pretty close to the crossroad, because a rally above 1.40 would suggest strong optimism in the medium term, because the USD will remain strong with the BoJ and SNB intervention-bound, and volatility in gold a bit riskier for safe haven (though it should still be considered safe haven).